Strata insurance may cover resulting building damage from a sudden and accidental water leak, such as a burst pipe, if the event is covered by the policy. It usually does not cover repairing the failed pipe, seal or fixture itself. Gradual leaks, wear and tear and poor maintenance are commonly excluded, but the policy wording determines the outcome.
What may be covered?
A strata policy may cover water damage to insured building elements, such as fixed walls, ceilings or floors. Insurers generally consider two separate costs:
- Repairing the failed component: the pipe, fitting, seal or fixture that caused the leak.
- Repairing the resulting damage: damage the escaping water caused to insured parts of the building.
Cover for resulting damage does not automatically include replacing the defective component.
The source also helps determine whether the plumbing is lot property or common property. In NSW, this depends on factors including its location and the registered strata plan, not simply where the water appeared. Repair responsibility and insurance cover are separate issues.
What is commonly excluded?
Policies commonly exclude deterioration, defective components and damage caused by gradual leakage, wear and tear or inadequate maintenance. A policy might therefore cover eligible ceiling damage while excluding the worn seal or pipe that caused it.
Exclusions, limits and definitions vary. Check the current policy schedule and Product Disclosure Statement, and report the leak promptly.
What should you do after finding a leak?
Limit further damage safely, notify the strata manager or owners corporation and preserve evidence. Follow the immediate safety steps for a burst pipe or ceiling leak in an apartment if water is actively escaping.
- Stop using water in the affected area: If safe and readily accessible, close the relevant isolation valve. Do not open walls or work on pressurised plumbing.
- Keep clear of electrical hazards: Do not approach wet fittings, appliances or wiring. Arrange emergency professional assistance if water is near electricity.
- Report the leak promptly: Tell the strata manager or owners corporation where and when you found it and describe the visible damage. Follow their process for notifying the insurer.
- Document the damage: Take photographs or video before cleaning up. Keep plumbing reports, invoices and records of emergency work.
- Arrange professional assessment: A licensed plumber should investigate a concealed or unclear plumbing leak and provide written findings. Residents should not attempt plumbing repairs requiring licensed work.
- Limit further loss: Take only safe, necessary steps and follow strata or insurer instructions before non-urgent restoration work.
If the source is concealed or unclear, contact our licensed Sydney strata plumbers to locate the leak and document its source for the strata manager and insurer.